In its Decision, the Board found that Petitioner had shown a reasonable likelihood that it would prevail with respect to claims 1 and 2 of the ‘387 patent under 35 U.S.C. §§ 112 ¶ 2, 102(b), and 103(a). The ‘387 patent “generally relates to the conditional trading of securities, such as convertible bond ‘swaps,’ risk arbitrage, and combinations thereof in both listed and over-the-counter markets, via one or more electronic networks.” Petitioner challenged claims 1 and 2 under various grounds, including §§ 101, 102(b), 103(a), and 112 ¶ 2.

The Board first addressed claim construction under the broadest reasonable interpretation. The Board analyzed the terms “means for matching” and “means for matching or comparing.” Petitioner argued that both terms were subject to 35 U.S.C. § 112 ¶ 6 and indefinite. For the “means for matching” term, the Board stated that “the corresponding structure of a means-plus-function limitation must be more than simply a general-purpose computer or microprocessor to avoid impermissible functional claiming.” The Board agreed with Petitioner that the corresponding structure was merely the disclosed “trade engine” that performs the recited function of “matching” and “is tantamount to a general purpose computer,” but the Board also found that the specification included an algorithm expressed in “understandable terms” for performing the matching function. The Board therefore found that the corresponding structure for performing the recited function “to be a computer programmed to perform the ten processing steps illustrated in Figure 2 of the ‘387 patent.”

For the “means for matching or comparing” term, however, the Board found no comparable disclosure for the comparing function:

Simply reciting the function of “comparing” in the specification, and saying nothing about how the trade engine or computer ensures that the function is performed, is not a sufficient disclosure for an algorithm, which, by definition, must contain a sequence of steps. . . . Consequently, the general descriptions in the specification of comparing each buy and sell order, and comparing the requirements for each trade, do not amount to an algorithm expressed in understandable terms that transforms an otherwise general purpose computer into a special purpose computer programmed to perform the recited function of “comparing.”

The Board therefore identified the corresponding structure as “simply a computer programmed to compare data.”

The Board next addressed indefiniteness of these terms under § 112. Consistent with its claim construction analysis, the Board found the term “means for matching” definite and the term “means for matching or comparing” indefinite. The distinguishing factor was the presence of an algorithm expressed in understandable terms for the former term, but not the latter.

The Board next addressed the grounds in the Petition. Regarding the first ground—anticipation of claim 1—it was instituted because the Board was “persuaded by CME’s explanations and supporting evidence.” Notably, Patent Owner did not address Petitioner’s contentions in its Preliminary Response. Similarly, for the next ground addressed—obviousness of claim 2—it was similarly instituted as Patent Owner did not address the contentions. For the remaining grounds based on obviousness, the Board exercised its “broad discretion to institute review as to some asserted grounds and not others” and did not institute review as to the remaining asserted grounds. 37 C.F.R. § 42.208(a).

The Board next analyzed the challenged claims under 35 U.S.C. § 101, but was not persuaded “that the challenged claims are directed to an abstract idea, and [that] there are no other features recited in these claims that would transform the patent-ineligible concept to a patent-eligible application.” In its analysis, the Board first agreed with Petitioner that the claims are directed to a patent-eligible abstract idea: “matching algorithmic orders in a trading system where the orders include constraints and dynamically changing prices for multiple items,” which “is not different fundamentally from the kinds of commonplace financial transactions that were the subjects of the recent decisions from the United States Supreme Court.”

Turning to the second step in the analysis, however, the Board found significantly more. In its analysis, the Board looked for additional elements that can “transform the nature of the claim” into a patent-eligible application of an abstract idea:

That is, we determine whether the claims include an “inventive concept,” i.e., an element or combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea, itself. . . . The relevant inquiry here is whether “additional substantive limitations . . . narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.”

Consistent with its claim construction and § 112 analysis, the Board stated that the “means for matching” limitation “is not capable of being performed by just any generic computer that performs generic computer functions” due to the specific algorithm disclosed in the specification. Thus, “[w]hen, as here, a special purpose computer constitutes the structure that performs the recited function of ‘matching,’ in practical terms it imparts a meaningful limitation or adds significantly more to the abstract idea, itself.” As such, Petitioner did not show it is more likely than not that claims 1 and 2 are directed to patent-ineligible subject matter under § 101.

Finally, the Board rejected Patent Owner’s argument that it should exercise its discretion under 35 U.S.C. § 325(d) to deny the petition due to multiple challenges brought by Petitioner demonstrating “a pattern of delay tactics and piecemeal attacks.” Under the statute, the Board has the authority “to deny a petition when the same or substantially the same prior art or arguments previously were presented in another proceeding before the Office.” However, the Board is “not required to deny a petition merely because the same or substantially the same prior art or arguments previously were considered in another proceeding before the Office.” Here, the Board considered various factors in exercising its discretion, including the fact that a prior challenge was directed to a different, parent patent linked by a continuation-in-part application, new grounds were put forth in the present Petition, and the merits of the §§ 102 and 103 grounds were not reached in the prior petition.

In the end, covered business method patent review was instituted as to claims 1 and 2 of the ‘387 patent based on indefiniteness; claim 1 as being anticipated; and claim 2 as being obvious.